Editorial
Search “customer experience” or “employee experience,” and you’ll find a huge array of resources on everything from designing effective programs to creating listening channels. Leaders know that creating meaningful experiences matters, while at the same time tying experience management to tangible business results. But that involves looking at data: rational, logical and structured.
At the core, employees, customers and yes, even leaders are human. To create authentic, impactful experiences, we must first understand and embrace how humans think and act. Therefore, we need to consider an overlooked question: What actually drives the desired behavior? In other words, how do perceptions and emotions shape actions, influence loyalty and impact decision-making?
The Role of Emotions and Perceptions in Human Decisions
Each day, we’re faced with countless choices, from simple, routine decisions to more complex, high-stakes situations. Fully evaluating each decision is not only impractical, it’s impossible. In his book, "Thinking Fast and Slow," psychologist and Nobel Prize winner in Economics Daniel Kahneman famously found that 75% to 80% of decisions are not strictly rational. Instead, they rely on emotions and mental shortcuts rather than conscious deliberation.
Kahneman outlined two primary thinking modes: "System 1" and "System 2." System 1, or intuitive thinking, is fast, unconscious and automatic, while System 2, or rational thinking, is slower, deliberate and logical. Most of our daily decisions are made using System 1, which means we rely on cognitive shortcuts known as heuristics. While these heuristics make decision-making easier, they can also lead to biased or less-than-perfect outcomes.
Understanding the dynamic between emotion and decision-making isn’t just an interesting insight — it’s foundational to cultivate strong, lasting connections with customers and employees. Knowing how emotions and perceptions shape behavior helps brands and employers craft experiences that feel intuitive and personal to the people they serve.
Related Podcast: Why Emotion Is a Critical Leadership Data Point
Why Trust and Loyalty Are the New Business Imperatives
Trust has emerged as one of the strongest emotions that drive us as humans. According to the Edelman Trust Barometer, trust between people and institutions hinges on a mix of perceived competence and ethical behavior. Ethical considerations such as purpose, transparency and fairness are valued even more highly than mere competence, highlighting that trust is driven not only by delivering good results but by ensuring that these outcomes serve the broader public interest and align with societal expectations.
Today’s world is one of shifting trust. According to the 2024 Edelman Trust Index, public trust in traditional institutions like government and media is rapidly eroding, accelerated by misinformation, social media echo chambers and political polarization. This “trust gap” has people searching for stability and reassurance — and many are looking to businesses to fill this need because they can demonstrate value and values simultaneously. As such, businesses now rank as more trustworthy than other institutions in society because employees tend to find employers that meet their direct needs. But this trust isn’t built on functional service alone. The emotional connections businesses can offer have become a critical element of modern business strategy, moving beyond “nice-to-have” status to become a competitive advantage. Trust becomes loyalty, and that is where business growth comes in.
As economic uncertainty and technological change raise fears, institutions that empathize with these anxieties and address them openly are viewed more favorably. Trust is also enhanced by institutions that engage in consistent communication and accountability, particularly as people grapple with challenges like job stability, climate impact and social polarization.
Related Article: 8 Steps to Build Greater Trust Within Your Workplace
How Perception and Emotion Shape the Workplace Experience and Employee Engagement
Decision-making, perception and emotion play defining roles in a workplace. Even when employees believe they’re being objective, emotions like trust, confidence or a sense of purpose can influence their actions and commitment. For example, an employee may choose to stay with an organization they trust and feel loyal to, rather than moving for a slightly higher salary elsewhere. This emotional loyalty can be a stronger driver than purely rational factors.
Perception in the workplace is the lens through which employees interpret and respond to their environment, directly shaping how they feel about their roles, colleagues and the organization. Each employee’s perception is influenced by a range of factors: personal experiences, cultural background, past employment and even their expectations and assumptions about the company. These perceptions can determine whether they see the organization as supportive, trustworthy and fair — or the opposite.
Meanwhile, positive emotions like pride, recognition, team camaraderie, manager and leader trust, or a sense of purpose are powerful motivators in the workplace. A company with a strong culture doesn't just offer jobs; it creates a sense of belonging, cultivating a strong emotional connection that resonates deeply with employees’ values and aspirations. When employees feel recognized and valued, they experience greater job satisfaction and are more motivated to contribute to organizational success.
Tapping into these psychological drivers can make all the difference in cultivating a positive workplace experience. Organizations that understand these dynamics can shape employee interactions in ways that foster positive perceptions and emotions, guiding employees toward greater engagement and loyalty almost intuitively.
Understanding the emotional connections behind decisions enables companies to foster a cultural transformation that is intentional — one that prioritizes understanding, designing and measuring the impact on both customer and employee experiences. People want to feel good about themselves, which is reflected in the brands they choose and the companies they work for.
Related Podcast: Melissa Daimler on How to Intentionally Design Corporate Culture
Emotional Experience Management as a Strategic Imperative
The idea that emotion drives workplace outcomes is gaining empirical support:
- Engaged employees are 21% more productive than their disengaged counterparts.
- Companies with highly engaged employees experience a 41% reduction in absenteeism.
- Highly engaged teams show a 21% increase in profitability.
Much of what shapes these emotions in the workplace is rooted in employees’ past experiences, beliefs and expectations. As Anne Beall, CEO of Beall Research, explains:
"We’re hardwired to react to our emotions. Thus, humans are strongly motivated to engage in positive emotional experiences, whether through interactions with people or through products and services. We’re likely to remember the people and companies that provide us with strong positive emotional experiences and engage with them more."
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According to OC Tanner’s 2024 Culture Report, organizations that focus on these emotional drivers see performance improvements across the board. Employee engagement scores rise, turnover rates fall and overall job satisfaction climbs. The connection between employee emotional satisfaction and business success underscores the importance of addressing both emotional and functional aspects of the employee’s experience.
Embracing Emotions and Perceptions for Business Success
When it comes to both customer and employee experience, perceptions and emotions aren't just influential, they’re foundational. A brand’s ability to understand and positively influence these elements can drive loyalty, improve decision-making and build a strong foundation for long-term success. In a world where trust in traditional institutions is waning, companies that cultivate positive emotional experiences can position themselves as trusted pillars of stability and value. By creating environments that address both functional needs and emotional desires, brands can build lasting relationships that feel deeply personal to customers and employees alike.
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